Compliance is not a one-and-done event; it is an ongoing process that requires regular updates and attention. Part of your obligations as an employer involves doing some calculations, providing required notices to employees, and meeting reporting requirements set by various governing bodies.
Calculations and Determinations
Certain calculations and determinations must be performed annually to ensure that your company and its benefits offerings comply with laws and regulations.
Employers with an average of 50 or more full-time equivalent employees in the previous year are considered ALEs under the ACA.
ALEs are required to ensure that their health coverage is affordable and meets minimum value standards to avoid potential penalties.
Employers must identify full-time employees for purposes of ACA compliance using a measurement and stability period methodology.
Before you can send the required Part D notice to employees or report to CMS, you must determine whether your prescription drug coverage is creditable — that is, whether it is expected to pay at least as much as standard Medicare Part D coverage on average.
Notices and Reporting Requirements
Employers are responsible for both distributing certain employee notices and submitting reports to government agencies such as the IRS, the Department of Labor (DOL), and the Centers for Medicare and Medicaid Services (CMS). These requirements help ensure transparency and regulatory compliance.
This notice informs employees whether their prescription drug coverage is expected to pay, on average, as much as the standard Medicare prescription drug coverage.
Employers who provide prescription drug coverage are required to disclose annually to CMS whether the coverage is creditable.
These forms are used to report information about offers of health coverage and enrollment in health coverage for employees.
Employers that issue 250 or more W-2s for the year are required to include the cost of group health coverage on their employees’ W-2 Wage and Tax Statements.
Sponsors of self-insured health plans must pay the Patient-Centered Outcomes Research Institute fee annually using IRS Form 720. The fee is based on the number of covered lives under the plan and is due by July 31 each year.
Employers that have experienced a compliance failure under COBRA, ACA market reform requirements, or comparable HSA contribution rules must self-report and pay the resulting excise taxes using IRS Form 8928.
Employers with employees in California, the District of Columbia, Massachusetts, New Jersey, or Rhode Island must file annual MEC (minimum essential coverage) reports with each applicable state, in addition to federal 1094/1095 filings.
This form provides information about the plan’s financial conditions, investments, and operations.
This form collects data about the number of individuals employed, their distribution by legal job category, and information about their sex and race/ethnicity.
Some insurance carriers require confirmation that Summary of Benefits and Coverage (SBC) documents were distributed and ask employers to report how they were delivered.
Some insurance carriers may request annual confirmation or updates on your MSP status. This process helps to ensure correct coordination of benefits. As an employer, you’re required to provide accurate information when requested.
Employers must report the average monthly premium they pay and employees pay for health insurance benefits to CMS. Some carriers may assist in collecting this information and submitting it if the employer meets the reporting deadline.